Vision comes before planning in life, business, and wealth management

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How can financial advisors know the vision of their clients if clients don’t know it themselves? In this insight, Simple Expert, founder and CEO of TFM, Alex Kirby shares how to standardise and implement the family vision, benefiting advisors and enhancing client relationships and retention.
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What you need to know

  • Before developing plans in any aspect of life, business, or wealth management, it is essential to understand the client’s vision and objectives, especially when clients are uncertain.
  • Modern advisors, known as Wealth 3.0 advisors, prioritise holistic well-being and ensure that wealth management encompasses more than just financial assets.
  • Simple Expert Alex Kirby explains how advisors can assist clients in articulating their vision and ensuring that wealth management planning is rooted in their family values and well-being.

Governance Updated on July 10, 2024

Imagine sitting down with a client and asking them about their dreams and ambitions, only to be met with a blank stare. This scenario is more common than you might think. Clients are asking for directions with no destination in mind. This vision gap highlights a missing link in wealth management: vision comes before planning.

“How can financial advisors know the vision of their clients if clients don’t know it themselves?” Alex Kirby, CEO at TFM.

Characteristics of a Wealth 3.0 financial advisor

Meet the Wealth 3.0 Financial Advisor—a modern advisor who understands that wealth is about more than just money. These advisors are trusted confidants, acting as fiduciaries and prioritising the well-being of their clients and their families. They know that true wealth encompasses the client’s entire life, not just financial assets. They are driven by a desire to help people and want to learn and grow every day.

In addition to everyday responsibilities, Wealth 3.0 advisors focus on:

  • Client Well-Being: Prioritising the holistic well-being of their clients.
  • Family Engagement: Understanding the importance of family dynamics and communication.
  • Partnership: Introducing appropriate resources at the right time

The advisor capacity challenge

Most financial advisors today are close to max capacity. With countless tasks ranging from business development and client servicing to financial and estate planning, advisors are stretched thin. The sheer volume of responsibilities makes it nearly impossible to deliver consistent, high-quality service every time for every client. This can impact the overall client experience, adding stress to the advisor-client relationship and hurting the consistency of the firm’s brand.

The client’s communication and decision-making challenge

Another significant challenge is dealing with clients who struggle with communication and decision-making. Clients often lack a clear vision and direction, making it difficult for advisors to create effective financial and estate plans. This lack of clarity complicates the advisor’s job, as they need to piece together a coherent plan without a solid foundation.

Additionally, poor communication within families—between spouses, children, and parents—can further hinder the planning process. An advisor’s relationship with their client’s family will never be better than the client’s own relationship. If a client can’t effectively communicate with their family, an advisor can’t either.

TFM: A partner for family vision

Total Family Management (TFM) partners with family offices and wealth firms to help clients uncover their vision. We use a proprietary approach involving family coaches and specialised software to facilitate and document the vision conversation. This process ensures consistency, saves advisors time, opens lines of communication, and provides a comprehensive vision that families can share and use as a cornerstone in their financial planning.

Through our efforts, we are standardising the term “vision” across the industry to mean a clear picture of purpose, values, and roles. Purpose is the “why,” and values are what’s important, especially when making difficult decisions, and roles are the areas of life that we prioritise most.

How does this benefit advisors?

Family offices and wealth firms gain several benefits from partnering with TFM:

  1. Improved retention & referrals: Clients are more likely to stay with an advisor who offers comprehensive, visionary planning services, increasing loyalty and reducing turnover. They are also more likely to introduce family members and friends.
  2. Enhanced relationships: By providing clients with a clear vision, advisors deepen their understanding of their clients’ values and goals, leading to stronger, more meaningful relationships.
  3. Increased engagement: Clients who have a clear vision are more motivated to engage in financial and estate planning, leading to better outcomes and higher satisfaction.
  4. Time savings: Advisors save valuable time by leveraging a partner for the vision conversation to TFM, allowing them to focus on other critical aspects of their practice.
  5. Differentiation in the market: Offering vision planning sets advisors apart from competitors, making their services more appealing to potential clients.
  6. Cost-effective partnership: TFM’s services are affordable and provide a strong return on investment, seamlessly integrating into the advisor’s fee structure.

The simplified plan for implementing the family vision

A term like AUM (Assets Under Management) is standard and understood throughout the industry, but when you say “vision,” everyone thinks of something different. Vision means a clear picture of purpose, values, and roles. Below is a simplified version of TFM’s process to help advisors implement family vision:

“One of the things TFM is doing throughout the wealth industry is standardising the meaning of the word vision.” Alex Kirby, CEO at TFM.

Step 1: Vision work for every household

Every client and household can participate in vision work. TFM charges $2,495 per household for a comprehensive vision plan, typically covered by the family office. The process involves four to six sessions with a TFM coach, ensuring a thorough and consistent approach.

Step 2: Debrief and integration

After completing the vision sessions, advisors sit down with their clients to discuss what they learned. Advisors ask insightful questions to integrate the family vision into financial planning. TFM provides key insights and quotes to facilitate this discussion.

Step 3: Sharing the vision

Advisors encourage clients to share their vision with family members, including non-CFO spouses and children. This improves family communication and helps advisors build connections with the next generation. Clients can also choose to extend the vision process to their children, further enhancing family cohesion.

Step 4: Continuation and further support

Many clients continue to engage with TFM for ongoing support, and community, including family meetings and additional coaching sessions. This ensures that the vision remains dynamic, adapting to changes and guiding the family over time.

Success and failure

Success stories: One of our most notable success stories involves a multi-generational family in the Midwest. The patriarch, a former CEO of a major company, and his wife developed a family vision through TFM. They shared this vision with their children, who found it so valuable that they chose to create individual visions for their own families. This process strengthened family bonds and led to the creation of a collective vision for their family foundation. The advisor now integrates these visions into every annual review, starting each meeting by discussing any updates to the family vision. As a result, all the children who were not initially clients of the family office have now become clients.

Failure stories: Conversely, we’ve seen instances where advisors lost clients due to a lack of family engagement. One firm lost a top client where, after the patriarch had passed away, his spouse moved their assets without ever taking a meeting with their advisor of 20+ years. Another firm lost assets under management when a widow passed her wealth to her children, who then moved the funds without consultation. These examples underscore the importance of building strong, family-wide relationships to prevent such losses.

In life and wealth, vision comes before planning. For Wealth 3.0 Financial Advisors, understanding and integrating their clients’ visions is key to being a multi-gen trusted advisor. Partnering with TFM not only enhances client relationships but also sets advisors apart in a competitive market. By helping clients articulate their vision, advisors can ensure that financial and estate planning is grounded in what matters most—family values and well-being. Embrace the vision, and you’ll find that the planning naturally follows.

 

About TFM

Total Family Management (TFM) offers a turn-key family office solution for governance and dynamics, supporting clients beyond the financial balance sheet. TFM’s coaches and proprietary software help individuals, households, and families find alignment, build trust, and improve communication.

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